Obamacare Outsourced

The Obama administration has offshore outsourced Obamacare. They made Accenture the lead contractor for the website healthcare.gov. The contract is estimated to be worth $90 million and the original contractor, CGI Federal, is out. We pointed out earlier that the failed Obamacare website was poetic justice as CGI Federal is also an offshore outsourcer of U.S. jobs. But now the poster boy for labor arbitrage, offshore tax havens, and bloated, often failed government contracts is in charge, Accenture.

Accenture is one of the biggest offshore outsourcers of American jobs. In 2012 they used 4,037 H-1B Visas alone and are ranked #5 in using foreign guest workers to displace U.S. workers and offshore outsource jobs. The H-1B Visa is known as the offshore outsourcing Visa. Offshore outsourcers use this Visa in a notorious method to displace Americans and technology transfer large projects to cheap labor nations.

In 2012, the 10 employers receiving the largest number of H-1B visas were all in the business of outsourcing and offshoring high-tech American jobs. Many of the jobs that went to H-1B workers should have instead gone to U.S. workers, but employers are not required to recruit them before applying for an H-1B, and can even replace their U.S. workers with H-1Bs.

Accenture has more workers in India than any other nation. In 2012 they had 80,000 Indian workers, 35,000 in the Philippines and only 40,000 in the United States. In all probability, those tech jobs just awarded under this contract and paid for with U.S. citizen tax dollars are in India or being done by imported foreign workers from India on guest worker Visas.

Accenture, like most BPO offshore outsourcers, saves money by underpaying foreign guest workers they import. Typically they pay 25% less for their imported employees than the prevailing wage for a similar United States citizen worker. In 2005, with the corresponding H-1B Visa good until Q1 2013, Accenture had 12,684 H-1B foreign guest workers earning an average of $53,042 per year. This is far less than the median $80,000 salary the same job responsibilities and skills required would fetch for an American worker. Accenture is so bad, they literally paid a foreign guest worker $25,113 per year with the job title, Chief Programmer. Typically chief programmers make six figures in America. Accenture is systemic in their labor arbitrage of United States citizens. Of their imported H-1B foreign tech workers in 2005, they paid 15.3% less than $40,000 a year and 40% less than $60,000. This is way, way below the kind of salaries one would see for a highly trained, college educated technology professional.

The situation is so bad they block out American contractors from obtaining government contracts by undercutting labor costs in addition to lobbying and campaign contributions.

The H-1B program harms employers that hire American workers. Domestic sourcing companies, such as Ameritas Technologies and Systems in Motion, are being penalized by U.S. Government H-1B policies because they are hiring American workers. Their competitor firms hire H-1B workers because they can be paid less than Americans.

The Obama administration has simply replaced one political corporate crony with another even bigger one. The amount of money these government contracts pay is absolutely obscene. The many failed and terrible government websites are proof positive government contracts are glorified corporate welfare. Worse than that, most Americans with technical skills can architect and design miles above superior quality, extremely efficient systems than what results from these various government contracts, if just given half a chance.

The corruption to obtain Obamacare contracts is beyond the pale and well documented. The Sunlight Foundation published a list of contractors making out like bandits on Obamacare. Accenture has already been awarded $2,136,175.98 just for the Affordable Care Act. Clearly pay to play is operating at full volume in D.C. To obtain these contracts, Accenture spent $5,590,000 in lobbying along with $1,188,644 in campaign contributions in 2012 alone.

In 2010 when Obamacare was being crafted, America was warned on offshore outsourcing of I.T. and health related technology. Accenture was one of those outsourcers pushing for the deal. They also managed to get into the White House with the most absurd public relations stunt. They claimed to retrain people whose jobs were sent to India. Get that? Americans have the skills and ability, yet they lose their jobs anyway. The very same outsourcers who caused such massive job loss then get into the While House policy room and push for government subsidies in order to retrain these same American workers. These corporate outsourcers in turn use this newly formed policy agenda as a public relations stunt to claim they are trying to help the American worker. The biggest insult of all of this is the U.S. taxpayer usually foots the bill for such corporate agenda rot such as this.

Accenture has quite a track record and not the good kind. They offshore outsourced taxpayer subsidized green jobs and were lined up to get those 2009 many contracts along these lines. They also have been fined by the DOJ:

Accenture LLP has agreed to pay the United States $63.675 million to resolve a whistleblower lawsuit, the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the Eastern District of Arkansas, alleges that Accenture submitted or caused to be submitted false claims for payment under numerous contracts with agencies of the United States for information technology services.

Accenture has agreed to resolve allegations that it received kickbacks for its recommendations of hardware and software to the government, fraudulently inflated prices and rigged bids in connection with federal information technology contracts.

Accenture has also been a poster boy for tax avoidance. In the U.K., they have been under investigation In 2005 they even managed to get their own special law introduced in Congress to avoid paying taxes:

The Wall Street Journal reported July 14th that, as drafters of a technical corrections bill, you are contemplating including a special provision to shield Accenture from the anti-inversion provisions passed as part of last year's international tax law. Writing new rules with the specific purpose of allowing Accenture to avoid paying millions of dollars in U.S. taxes on its international profits would be extremely unfair to U.S. companies who pay their fair share. We urge you not to incorporate these controversial measures into the legislation.

The fight to keep offshore outsourcers from receiving federal contracts was lost in Congress, that's how bad the D.C. corruption is. Dodging taxes is now standard practice and Accenture was ranked 12th of the biggest corporate tax dodgers in 2010.

Accenture is incorporated offshore and has been the subject of many a Congressional hearing on inverted companies incorporated in Bermuda or the Caymans to avoid taxes. Just recently their profits rose another 16% on tax avoidance. This is after the public relations stunt to move company headquarters to Ireland from Bermuda in 2009, so clearly Ireland is just about as good as Bermuda in terms of national tax avoidance. Public relations stunts and corporate branding is something Accenture is big on. Not only did they change their name in the nick of time before the Enron scandal broke, they will do just about any media relations coup to avoid the truth coming out that they are an offshore outsourcer. Yet instead of a slam down on this company and all those like them, here we are in 2013 watching a company who represents everything wrong with America being rewarded a high profile government contract, littered with people's very personal and financial information to boot.

America is being eaten away from the inside out. We have a gigantic parasite killing the nation called legal corruption in Washington D.C. Yet another corporate campaign donor manages to receive a multibillion dollar contract. Unfortunately this is standard fare in Washington. It should be no surprise America's entire middle class is becoming extinct. America's politicians sold 'em out for campaign cash and other legal forms of bribery.

Comments

I don't disagree about this being wrong but there has been no huge protest while private sector jobs have been siphoned overseas for the last 5 decades. The dagger in the heart being NAFTA and all the follow up 'free trade bs'.

There is little to no real manufacturing here anymore and that all started when the US chose not to tariff steel imports.

The only thing left is the service industry. The only unionized service company of any type of scale is UPS. The Teamsters pension fund is supposed to go bankrupt in another 10 years. Then the Government will kill that union somehow.

It's okay everyone has their iPhone made in China by people who are so stressed at work they commit suicide. Eventually Asian countries will just steal US intellectual properties and bankrupt those companies too.

I really can't imagine having to call someone in India for a health related billing issue. People will really be p#ssed at that. This could blow up in their face.

On a better note Robert I hope you & yours had a good holiday!

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I overview the employment report in excruciating detail and every month I am horrified. I am especially horrified because this should not be if we had any real representation in D.C.

We should not be having a jobs crisis 6 years after the start of the recession and the fact manufacturing imploded, well they can blame capital all they wish, but the reality is there is plenty of capital and credit. They simply want America to think shipping jobs overseas isn't a problem and very obviously it is.

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QE has been nothing but a big bank bailout. Even if QE is neutral which Wall Streeters claim the Fed has to be paying fees to the Banks and my wager is that they have bought every bad mortgage CD out there by now.

They cut off extended unemployment which is a lifeline for many Americans while they continue QE.

The last jobs report didn't budge the market even a bit. Wall Street is so disconnected from reality it boggles the mind. That jobs report without QE would have caused a plunge.

No news stories I have read mention the outsourcing as you do. For the most part it's apparently being buried by the Obama media.

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In defense of the Fed, they cannot control Congress and policy. Bernanke has been highly critical of Congress, repeatedly commenting (if one boils it down), that Congress is prolonging the suffering and the jobs situation.

I believe he said they should extend unemployment in so many words, referring to stimulus, government spending, jobs.

Buried by corporate public relations groups, the Obama administration and using bridgegate as a blow off any real news from the headlines cover.

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It is my experience that everyone is implementing what they call lean manufacturing practices to optimize production costs. In all its meaning, it is essentially finding workers in Asia for literally everything. The article, however, is calling out one particular segment of global population, i.e., Indians, alone as pretty much the major culprits for the loss of jobs here, which is bad given that it is the business development guys in American Corporations who are inducing the problem.

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The entire post above is about Accenture - let me demonstrate with some sentences from there:

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But now the poster boy for labor arbitrage, offshore tax havens, and bloated, often failed government contracts is in charge, Accenture.
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Accenture is one of the biggest offshore outsourcers of American jobs. In 2012 they used 4,037 h-1B Visas alone and are ranked #5 in using foreign guest
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Accenture has more workers in India than any other nation. In 2012 they had 80,000 Indian workers, 35,000 in the Philippines and only 40,000 in the United
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Accenture, like most BPO offshore outsourcers, saves money by underpaying foreign guest workers they import. Typically they pay 25% less for their
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Accenture is systemic in their labor arbitrage of United States citizens. Of their imported H-1B foreign tech workers in 2005, they paid 15.3% less than
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The situation is so bad they block out American contractors from obtaining government contracts by undercutting labor costs in addition to lobbying and
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The Sunlight Foundation published a list of contracters making out like bandits on Obamacare. Accenture has already been awarded $2,136,175.98 just for the Affordable Care Act.
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To obtain these contracts, Accenture spent $5,590,000 in lobbying along with $1,188,644 in campaign contributions in 2012 alone.
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Accenture was one of those outsourcers pushing for the deal.
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Accenture has quite a track record and not the good kind. They offshore outsourced taxpayer subsidized green jobs and were lined up to get those 2009 many contracts along these lines. They also have been fined by the DOJ:
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Accenture LLP has agreed to pay the United States $63.675 million to resolve a whistleblower lawsuit, the Justice Department announced today. The
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Accenture has agreed to resolve allegations that it received kickbacks for its recommendations of hardware and software to the government, fraudulently inflated prices and rigged bids in connection with federal information technology contracts.
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Accenture has also been a poster boy for tax avoidance. In the U.K., they have been under investigation In 2005 they even managed to get their own special law introduced in Congress to avoid paying taxes:
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Accenture is incorporated offshore and has been the subject of many a Congressional hearing on inverted companies incorporated in Bermuda or the Caymans to avoid taxes.
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To anyone versed in English sentence structure at all, the subject of every one of those is Accenture, not some self-concious H1-B Visa holder.

Please feel free to point out where the subject is anything other than Accenture and their manipulative ways.

Second - are you employed by Accenture? Or perhaps a low-paid H1-B Visa holder? This is the second or third post I have seen on the web where people seem to be defending Accenture's bad behavior - makes me wonder if they are getting some of their low-paid hirelings to try and massage their image. Theirs is not fair behavior, and, frankly, they are the enemy of things U.S. So much so that perhaps the White House might have done us a favor by hiring Al Qaeda instead of Accenture - at least their damage is limited to a building at a time instead of the lives of millions of workers.

On the off chance that you work for Accenture, or are one of the H1-B workers employed by one of the other pirates, and feeling a little warm about all this, you should know we have a tradition here of people who are more concerned about their Master's house being on fire than their own - you can read about it here:

Let's just cut to the inevitable endgame - where should we all send our birth stats, SSNs, DNA samples, etc. to so we can skip any delays with this Obamacare website crap. Who gets it? The Philippines? India? Some dudes riding the busses in Pakistan? A terrorist in Somalia or Syria? Maybe some shell companies that own stock in Accenture that are based out of South America? Who wants it? Eh!?

Good to know Americans have to pass urine tests and have background checks that last for years (and still don't get hired) to work for US contractors or even crappy low-wage jobs, but our information is forcibly gathered by "our government" and given to people that owe us no allegiance. Fantastic! Wait, wasn't some Minnesota-based retailer just in the news for exposing data of 110 million customers to hackers or something (which is episode 101,000 in ID theft and corporate negligence/malfeasance)? No worries, the NSA I'm sure will keep an eye out for us, along with the DOJ, and FBI, and Chris Christie, and the MSM, and on, and on. Nothing to see here, our Founding Fathers would be so proud of what we have running the show, not like they would revolt against this cesspool of corruption or anything, no, certainly not.

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whatever the question is in IT, the answer pushed on us by Xander Group investments is that job needs to move to India so their 100's billions of India infrastructure development investments continue to grow 10-50% a year. And guess who also controls the board of directors in the corporate world via their capital funding rules? When you tell the CFO to shift everything offshore he can or his debt interest rate goes up, what does he do to protect his job ?

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The name change from Andersen Consulting to Accenture occurred before the Enron meltdown, and was forced by Arthur Anderson, as Andersen Consulting had been spun off as a separate entity in around 1989. There's plenty one can blame on Andersen Consulting/Accenture, they were one of the lobbyists for the 1706 IRS rule to stamp out indeptendents, their H-1b abuse and outsourcing. I see that this story is getting picked up, you might want to investigate what I say and submit corrections to the media that is publishing this - rest assured the H-1b pushers will make a big deal out of it

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You're right, but they changed the name when they had to of known Enron was happening. Enron really was known internally by 02/01 and they changed the name 01/01.

Also, they did not gain actual independence from Arthur Andersen until August 2000. Yes, the company split in 1989, but they were still recommending clients and making transfer payments up until that time. The timing has always been pretty interesting, they had 11 years to resolve and truly separate the two divisions, now companies, stop referrals, payments, yet magically at the stroke of Enron did the name change.

Folks, anyone reading 1706 IRS rule this is a host of independent contractor IRS requirements which effectively wiped out STEM small business independent contractors and gave rise to the wage slave organizations where large corporations will only contract with them and not the little guy directly.

I did not know they lobbied for this rule IRS 1706 and this is an outrage onto itself. As a result of this contract houses pocket profits which should be going to the actual engineers. They can take up to 80% of what they are charging a company for the contract "worker" instead of that contract worker being a small business and obtaining what they are really worth.

It really reduced the status of engineers, their value, their wages, their income and their influence and put the profits into the hands of these glorified slave traders. these contract houses do not add value, supervise, are involved in any engineering related decisions, they are simply body shop buffers to avoid IRS misclassification and penalties. A guy flew his airplane into an IRS building over this rule, not that such actions are condoned but it did wipe out many a technical small business owner.

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Accenture's name change was 10 months before the Enron scandal broke. I knew someone pretty well who worked at Andersen Consulting during the name change - I do feel that it had nothing to do with Enron - but there is *plenty* of indisputable bad stuff they've done. I see that this story is getting some traction - good. It really is an outrage, it's an example of how profoundly disenfranchised the American tech worker is

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You may want to double check this claim from other sources before you accept it (I'd do it, but I have to go run errands, but didn't want to leave you twisting in the wind). It makes perfect sense, they benefitted the most from it

just wanted to give you a cite

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I'm sure they were not the only ones lobbying to wipe out small engineering consulting businesses.

As far as Enron goes, we're leaving it. You are referring to the public timeline the story broke. Internally all knew very close to the name change date that Aurthur Anderson was cooking the books for Enron and odds are they knew this long before and one of the reasons they ended up going to jail over it (a shocker rarity!). As far as this piece goes, the focus is not on 2001, but on 2014 and how right now, this is what Accenture is doing, right now and recently is still having overbillings, failed contracts. There is another huge one in Texas that cost the state millions to even get out of, not mentioned in this article.

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The New York Post article spells it with an 'O' rather than an 'E', and I saw it that way in your posts too.

I swear I'm not trying to bust your chops on this, I'm trying to help prevent them from doing it - you have a big story here, and you're dealing with people who will take the slightest inaccuracies to discredit you in your exposure of a real outrage

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The facts of the article are not in dispute. I've heard back from NYP and it seems the article was well received, quite popular.

Only techies focus on typos ;), don't worry, the facts on STEM graduation rates and how Americans who are extremely skilled and highly educated in the best universities in the world are not obtaining employment in their chosen field of study were heard loud and clear.

NYP has a huge circulation, national readership and clearly it is important to you to get these facts out there, that STEM U.S. citizens need jobs in their field, so to obtain more coverage in the MSM, you might write the major press editor's desks pointing out the lack of accurate coverage.

I can see what I can do, although you see my focus is "all things economic" vs. just writing on guest worker Visas.

We should also thank the New York Post for daring to publish on the topic!

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CGI has plenty of off shore programmers as well. Consumers Energy in MI used them for a major project. When corrections were needed the project manager invariably advised that the off shore programmers would attend to the many issues. I suspect there wouldn't have been so many issues if local programmers had been used.

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Accenture is one of the top federal contractors, offshore outsourcing, importing foreign guest workers and the costs of these contracts are absurd. Are we not all fairly certain that a team of 12 could have been put together with $23 million start-up funds and a much better product in one third of the time would have materialized?

We wrote about Accenture since almost all of the press just completely ignored the fact they are BPO, offshore outsourcer, with many failed contracts or "works sorta" results after the original debacle.

I'm fairly certain most people technical know what a ripoff and scam these Obamacare websites really are, as well as hacker havens.

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Econospeak dug into Accenture's financials and found some interesting effective tax rates and implies it is due to offshore outsourcing, as I suspect.

Truth be told, I too dug into Accenture's 10-k and other financials but I could not nail down their U.S. federal tax beyond they gained $243 million by settling U.S. federal tax audits from 2006 to 2009.

Very convoluted and no surprise from a multinational moving tax havens probably doing the double dutch and assuredly offshore outsourcing since this is 40% of their worth.

Glad to see someone pick up on their taxes, non-trivial on a multinational!

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I immigrated to US from Asia but I completely agree that those companies are abusing American generosity - they (the executives) use every loopholes and bribe all the way to the top just like their country of origin. There is no honesty and they do not play by rule. They bring H1-B workers directly en mass from INDIA instead of hiring American workers or talented students from top US universities! American jobs are destroyed, middle class is disappearing very fast...What can be done to have our policymaker's attention to fix this MESS? What can be done to make our CEOs/so-called MBA-executives think long term? Currently their goal is so short sighted, they just want to minimize the cost outsourcing everything possible, increase quarterly share value and build a great resume for themselves! They are not thinking about this great country and its future!

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I read your article on ObamaCare in the NY Post and agree with 100%. This is how things get done in corporate world and now the government is in it too. CGI is just like Accenture, other side of the same coin and so is IBM and other companies. Companies like Wipro, Infosys, Tata(TCS), Cap gemini, Deloitte, IBM, Accenture have been in the business of Labor Arbitrage for over 15 years now and that is how they have grown in to Mega Billion dollar companies. The point is to accomplish this, they have defrauded the INS and the IRS. INS by bringing in Business Visas and L1 visas and the IRS by not paying taxes on this categories which technically should have been for H1B classifications. The INS woke up to it after 10 years and just fined them $30M, a drop in a bucket for a company of this size. They have gained unfair competitive advantage because of this and their business has been thriving because of this. I have been writing to different newspaper publications for the last 5 years but to no avail.

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Nice laundry list of BPO/outsourcers and glad to see people waking up to what IBM is these days, a shadow on their former self, in the business of labor arbitrage. They just sold off another major division to China, no surprise.

INS is now USCIS, and if they do anything, no matter how egregious you're right, it's a pay to play fine.

We should not leave out U.S. companies like Microsoft, Intel, TI, Oracle, Facebook, etc. They also labor arbitrage engineers, thrash their workforce and use foreign guest worker imports to do it. They seem to be most interested in systemic age discrimination and wage arbitrage.

The statistics are showing H-1B is also used as a tool to continue the incredibly bad, sex discrimination in S&T, in particular CS/EE/CE. Odds on hostile workplace for women techies as well. Really creepy that those companies who ignore keeping personal relationships out of the workplace have women techies, all noticeably young we might add while normal corporate cultures who do not allow such shenanigans do not. One needs to prove this statistically but it is a side comment on a real, very disgusting coincidence and obvious female career hidden sinkhole trap.

Is should be no surprise that Microsoft has been firing U.S. citizen techies and replacement them with foreign imports for years and we can see the results in their terrible OS products as of late.

One has to wonder if this is reverse discrimination for Microsoft does sponsor green cards, i.e. anyone who is not Hindu Indian need not apply?

Regardless even the major R&D based tech companies do this, although the BPO industry it is mush more brazen and one would have to be statistically blind to not see that fact.

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The GOP's proposed a bill: The Save American Workers Act (it's all of 2 pages long, not counting the congressional credits), and says:

"To amend the Internal Revenue Code of 1986 to repeal the 30-hour threshold for classification as a full-time employee for purposes of the employer mandate in the Patient Protection and Affordable Care Act and replace it with 40 hours.

Don't we all think the putting a lie in the title of a bill introduced in Congress should be outlawed?

That's a clear corporate bill so employers do not have to provide health insurance to their workers. I'm sure the lie is trying to claim that if America returns to slave labor we'll have more job creation.

(If we reduce wages and benefits to levels no one but a corpse could survive on, employers would hire more).

Isn't this tiring? One needs a staff of 20,000 to keep track of all of the lies and manipulations coming out of D.C.

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In addition to lowering wages, big corporations also prefer to have H-1Bs because it allows them to create a sort of modern-day indentured servitude. H1-B visa holders in the U.S. must continue to work at the company that sponsors their visas (or leave the U.S.). They can’t quit and get another job in the U.S. Most Americans may still be under the impression that indentured servitude ended in America sometime around 1865. But it has been revived by the H1-B visa program and big companies love it because of the social control it gives them over workers. I have contacted many elected official over the years, urging them to abolish the H-1B program altogether, but in today's Washington, money speaks louder than words.

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